| [2017] FWC 4849 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.318 - Application for an order relating to instruments covering new employer and transferring employees
Nokia Solutions and Networks Australia Pty Ltd T/A Nokia Group
v
Professionals Australia
(AG2017/2206)
COMMISSIONER JOHNS |
SYDNEY, 15 SEPTEMBER 2017 |
s.318 Application for an Order relating to instruments covering a new employer and Transferring Employees.
[1] These reasons for decision concern an application 1 made pursuant to s.318 of the Fair Work Act 2009 (Act) by Nokia Solutions and Networks Australia Pty Ltd T/A Nokia Group (applicant) seeking an Order from the Fair Work Commission (Commission) that a transferrable instrument, being the Alcatel-Lucent Employment Partnership Agreement 2009 (Agreement),
“will not cover those 395 personnel currently employed by Alcatel-Lucent Australia Limited who have accepted employment with Nokia Solutions and Networks Australia Pty Ltd (Nokia Australia) and expected to commence on 15 July 2017.”
[2] The application was opposed by the Association of Professional Engineers, Scientists and Managers, Australia (APESMA).
[3] On 11 July 2017 I heard the matter. At the hearing:
a) the applicant was, with permission pursuant to section 596(2)(a) of the Fair Work Act 2009 (FW Act), represented by Mr P Brown, solicitor with Baker McKenzie, and
b) APESMA was represented by Ms M Anthony.
[4] In support of the application evidence was received from:
a) Viviane Akkary, Human Resources Consultant for Nokia Australia (Exhibit A2), and
b) Mohan Vankadara, Customer Delivery Manager, Alcatel-Lucent Australia (ALU), Rhodes (Exhibit A3),
c) Raman Flawn, Account Director, Alcatel-Lucent Australia, Rhodes (Exhibit A4),
d) Jeremey James, Sales Support Coordinator, Alcatel-Lucent Australia, Melbourne (Exhibit A5),
e) Lyand Ignzcio, Customer Support Manager, Alcatel-Lucent Australia, Rhodes (Exhibit A6),
f) Gary Ruddy, Account Manager, Alcatel-Lucent Australia, Rhodes (Exhibit A7),
g) Sunil Theertham, Deputy Head Customer Engineering, Alcatel-Lucent Australia, Rhodes (Exhibit A8),
h) Vlad Valter, Senior Project Manager, Alcatel-Lucent Australia, Rhodes (Exhibit A9),
i) Anand Shinde, Maintenance Service Manager, Alcatel-Lucent Australia, Rhodes (Exhibit A10),
j) Coorg Narakesari, Senior Project Manager, Alcatel-Lucent Australia, Rhodes (Exhibit A11).
[5] The applicant also filed:
a) An Outline of Submissions (Exhibit A1), and
b) an aide-memoire that compared the provisions of the Alcatel-Lucent Employment Partnership Agreement 2009 with Nokia’s contracts of employment and the Professional Employees Modern Award 2010 (Exhibit 12).
[6] In opposition to the application APESMA filed:
a) An Outline of Submissions (Exhibit APESMA1),
b) Aide-memoire - Key disadvantages of the employment contract offered to Transferring Employees as compared to Alcatel-Lucent Partnership Agreement 2009 (Exhibit APMESMA2),
c) Witness Statement of Paul Davis, NSW Director, APESMA (Exhibit APESMA3),
d) Redacted version Witness Statement No 1 – APESMA2 (Exhibit APESMA4),
e) Unredacted version of Witness Statement No 1 – APESMA 2 (Exhibit APESMA5),
f) Redacted version Witness Statement No 2 – APESMA3 (Exhibit APESMA6),
g) Unredacted version of Witness Statement No 2 – APESMA 3 (Exhibit APESMA7),
h) Redacted version Witness Statement No 3 – APESMA4 (Exhibit APESMA8),
i) Unredacted version of Witness Statement No 3 – APESMA 4 (Exhibit APESMA9).
[7] None of the witnesses were required for cross-examination.
[8] At the conclusion of the hearing I issued the following decision in transcript,
“I have been greatly assisted by the parties having filed and served materials and by the submissions made today and the Commission is in a position to announce its decision.
On 13 June 2017 Nokia Solutions and Networks Australia Pty Ltd made an application pursuant to section 318 of the Fair Work Act [2009] seeking orders from the Fair Work Commission that the Alcatel-Lucent Employment Partnership Agreement [2009] will not cover those 395 personnel currently employed by Alcatel-Lucent Australia Ltd who have accepted employment with Nokia Solutions and Networks Australia Pty Ltd and expected to commence on 15 July 2017.
It is sought that the order comes into effect from 15 July 2017. In the light of opposition from APESMA and some employees, the matter was programmed for hearing and the applicant and APESMA filed and served materials in support of and in opposition of the application respectively.
Having considered the application the material filed in support of the application, the materials filed in opposition of the application and each of the matters that I am required to take into account, pursuant to section 318(3) of the Fair Work Act [2009], in the exercise of my discretion and balancing the relevant competing issues, I have decided to grant the application subject to the applicant submitting an amended draft order that addresses matters dealing with employees who are considered award-free and also the child care benefit in clause 3.3.1 of the Alcatel-Lucent Employment Partnership Agreement [2009].
I require those draft orders to be filed and served by 4 pm tomorrow and subject to those draft orders dealing with those issues I will issue those orders and my further reasons for decision will be issued in due course.” 2
[9] On 13 July 2017 the applicant filed amended Orders (Amended Orders) as follows:
“1.The Alcatel-Lucent Employment Partnership Agreement 2009 will not cover:
(a) those 395 personnel currently employed by Alcatel-Lucent Australia Limited who have accepted employment with Nokia Solutions and Networks Australia Pty Ltd and expected to commence employment on 15 July 2017; and
(b) who fall within the coverage and classifications of either:
(i) the Professional Employees Award 2010; or
(ii) the Telecommunications Services Award 2010.
2. The benefit described as the "Childcare Benefit - Reimbursement of Fees" set out at clause 3.3.1 of the Transferring Instrument shall continue to be available to each Transferring Employee provided that any Transferring Employee that elected to negotiate a higher Base Salary (in lieu of the Childcare Benefit) as part of his or her ongoing employment with Nokia Solutions and Networks Australia Pty Ltd, may, on or before 17 August 2017, pursuant to this Order, elect to revert to the Childcare Benefit in clause 3.3.1 in the Transferring Instrument with a consequential adjustment to the agreed Base Salary with Nokia Solutions and Networks Australia Pty Ltd.
3. That the above Order will come into effect on and from 15 July 2017.”
[10] In the covering correspondence the applicant’s representative noted that,
“Further to the observations of the Commissioner received today, we attach to this email an amended Order which deals with the preservation of the Childcare Benefit.
We believe that the attached amended Orders reflect the intent of the parties to ensure that:
The Orders will have no application to a non-award employee.
The Childcare Benefit for reimbursement of fees will be preserved for all Transferring Employees; and
Permits any Transferring Employee who agreed to “buy-out” the Childcare Benefit as part of their acceptance of ongoing employment with Nokia to revert to the provisions of clause 3.3.1 of the Transferring Instrument (if they wish) within a month of commencing with Nokia.
We note that our client proffered an undertaking this morning which was signed by Ms Akkary dated 12 July 2017. Whilst noting that the Commission intends to make Orders relating to the preservation of this benefit, if the Commission was of the view that for more abundant caution, the Undertaking should also be included as part of the Commission’s file, our client has no objection to this signed Undertaking being proffered and binding in addition to the Orders.”
[11] On 13 July 2017 the Commission, as presently constituted, issued Orders 3 consistent with the Amended Orders filed by the applicant.
[12] What follows are the further reasons for my decision.
[13] Section 318 of the Act sets out the circumstances in which an Order may be made by the Commission:
“318 Orders relating to instruments covering new employer and Transferring Employees
Orders that the FWC may make
(1) The FWC may make the following Orders:
(a) an Order that a transferable instrument that would, or would be likely to, cover the new employer and a transferring employee because of paragraph 313(1)(a) does not, or will not, cover the new employer and the transferring employee;
(b) an Order that an enterprise agreement or a named employer award that covers the new employer covers, or will cover, the transferring employee.
Who may apply for an Order
(2) The FWC may make the Order only on application by any of the following:
(a) the new employer or a person who is likely to be the new employer;
(b) transferring employee, or an employee who is likely to be a transferring employee;
(c) if the application relates to an enterprise agreement—an employee organisation that is, or is likely to be, covered by the agreement;
(d) if the application relates to a named employer award—an employee organisation that is entitled to represent the industrial interests of an employee referred to in paragraph (b).
Matters that the FWC must take into account
(3) In deciding whether to make the Order, the FWC must take into account the following:
(a) the views of:
(i) the new employer or a person who is likely to be the new employer; and
(ii) the employees who would be affected by the Order;
(b) whether any employees would be disadvantaged by the Order in relation to their terms and conditions of employment;
(c) if the Order relates to an enterprise agreement—the nominal expiry date of the agreement;
(d) whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace;
(e) whether the new employer would incur significant economic disadvantage as a result of the transferable instrument covering the new employer;
(f) the degree of business synergy between the transferable instrument and any workplace instrument that already covers the new employer;
(g) the public interest.
Restriction on when Order may come into operation
(4) The Order must not come into operation in relation to a particular transferring employee before the later of the following:
(a) the time when the transferring employee becomes employed by the new employer;
(b) the day on which the Order is made.”
[14] The following matters were either agreed or not contested.
a) Nokia Australia and ALU are related bodies corporate in that they share common ownership as a result of a worldwide acquisition by Nokia Corporation of the Alcatel-Lucent business, which was initially announced in April 2015 and, in the case of ALU, completed in January 2016.
b) The Transferring Employees who are the subject of the Application were 395 Australian based employees of ALU who accepted, on or before 6 June 2017, an offer to become employees of Nokia Australia commencing 15 July 2017 (Transferring Employees).
c) No Application was made with respect to the 51 employees of ALU who chose not to accept the offer of ongoing employment with Nokia Australia effective 15 July 2017. These employees remain employed by ALU pursuant to the terms of the Alcatel-Lucent Employment Partnership Agreement 2009.
d) The requirements of section 311 of the FW Act had been met in that there was to be a transfer of business from ALU to Nokia Australia on the basis that:
i. the employment of the 395 Transferring Employees would terminate immediately prior to the commencement of their employment with Nokia Australia on 15 July 2017; and
ii. the work that the Transferring Employees would perform for Nokia Australia is the same or substantially the same as the work the Transferring Employees were performing for ALU; and
iii. there was a connection between ALU and Nokia Australia as defined in section 311(6) of the FW Act in that Nokia Australia is an associated entity of ALU and would remain so at the point of time at which each Transferring Employee became employed by Nokia Australia on 15 July 2017.
Transferrable Instrument
e) The Transferrable Instrument is the Alcatel-Lucent Employment Partnership Agreement 2009.
f) The Transferrable Instrument:
i. was made in 2009 between ALU and the employees of ALU falling within the classifications set out at Schedule 1 to the Transferrable Instrument. There are no other parties to the Agreement;
ii. was approved on 19 August 2009;
iii. commenced operation seven days after August 2009;
iv. contained a term of three years from the seventh day after issue of the Approval Notice from the Workplace Authority (clause 1.5);
v. contained a provision that the Agreement replaced "any other applicable award that may regulate the employment of employees covered by the Agreement" (clause 1.4(i)); and
vi. contained a list of minimum salaries applicable to each of the classifications listed at Schedule 1, with an indexing provision that increased the minimum rates of pay "in accordance with the annual minimum wage review determined by the Australian Fair Pay Commission and its successor body, Fair Work Australia" (Schedule 1, sub-clause 1.5).
g) The Alcatel-Lucent Employment Partnership Agreement 2009 had a Nominal Expiry Date of 26 August 2012. During the three year term of the Agreement, the minimum rates of pay, as set out at Schedule 1 of the Agreement, increased with reference to:
i. the National Minimum Wage Order 2010, operative 1 July 2010;
ii. the National Minimum Wage Order 2011, operative 1 July 2011; and
iii. the National Minimum Wage Order 2012, operative 1 July 2012.
s.318(3) considerations
[15] In determining the application I considered each of the matters required under s.318(3).
s.318(3)(a)(i) - the views of the new employer
[16] Much of the evidence of Ms Akkary on behalf of Nokia Australia explained:
a) the background to the Nokia ownership of Alcatel Lucent,
b) the history of the respective businesses,
c) the Australian merger,
d) the offer of employment made by Nokia Australia to employees of Alcatel-Lucent (that was not conditional upon the termination of the Agreement),
e) the extensive consultation undertaken by Nokia Australia,
f) what was explained to employees made offers,
g) the benefits under the Agreement preserved for employees who accepted the offer of employment from Nokia Australia (that flowed to the employees who accepted the offers regardless of whether the Agreement was terminated),
h) the applicant’s notification to employees of the present application,
i) Nokia Australia, which employs around 380 employs does not have an enterprise agreement. It employs people under a combination of contracts, modern awards and the NES.
j) the differences between the classification under the Agreement and the Nokia Classification Matrix, and
k) the impact of the Agreement on Nokia Australia’s Standard Production Cost.
[17] To the extent that Ms Akkary gave evidence about the views of the employer it can be summarised as Nokia Australia desiring that the Agreement not apply to Transferring Employees because,
a) it would enable Nokia Australia to better align transferred employees with Nokia’s Classification Matrix,
b) it would assist Nokia Australia to implement a more consistent and relevant incentive program or programs relevant to the various job grades within the merged business,
c) over time, Nokia Australia would be able to negotiate with Transferring Employees to:
i. create a single availability allowance which is comparable to and consistent with existing Nokia Australia arrangements, and
ii. bring about a common remuneration and costing structure.
[18] The views of the employer weighed in favour of granting the application.
s.318(3)(a)(ii) - the view of the employees who would be affected by the Order
[19] It was difficult to garner the true views of employees; no credible survey or ballot was conducted.
[20] The applicant led evidence from 9 employees untroubled by the application.
[21] APESMA led evidence from 4 employees opposing the application. To the extent that they opposed the application concerns were expressed about:
a) the loss of the dispute resolution mechanism under the Agreement,
b) loss of the benefit of transmission of business rules under the FW Act if the business is sold or outsourced in the future,
c) the loss of protection from unfair dismissal if as a result of the Agreement no longer applying to them, they would be award free and earning more than the high income threshold.
[22] The articulated concerns weighed in favour of rejecting the application. 4
[23] In total evidence was received from 13 employees out of a total of 395 who accepted an offer of employment from Nokia Australia and were to be impacted by the decision made. Noting the small numbers of employees expressing a view either way, I was not satisfied that there was a weight of numbers either in support or in opposition to the application. In all the circumstances of the matter the quantum of statements filed carried little weight.
[24] APESMA also presented a petition signed by 96 employees who had accepted the offer from Nokia Australia but opposed the application. The petition provided that,
“In our view, such an order [under s.318 of the FW Act] would have a negative impact on our employment and on the security of benefits that we currently receive under the [Agreement].”
[25] Despite being provided with every opportunity to do so 92 of the Transferring Employees who signed the petition chose not to file a statement in the proceedings. Their claim that the order “would have a negative impact on [their] employment and on the security of benefits” could never be tested. In circumstances were all Transferring Employees have a contractual right to preserved benefits derived from the Agreement the claim made in the petition remained unexplained. I placed little weight on the petition.
[26] However, what was known at the time that the application was approved was that,
a) Nokia Australia made offers of employment to 452 employees of Alcatel-Lucent,
b) 395 employees accepted the offer,
c) of the 395 who accepted the offer about 53 expressed a desire directly to Nokia Australia that they still wanted to be covered by the Agreement (but accepted the offer knowing that the present application would be made), and
d) 51 employees rejected the offer (and are not the subject of this application i.e. will remain covered by the Agreement).
[27] That is to say,
a) 87% of employees accepted the offer,
b) of those who accepted the offer, 86% did not express a desire to Nokia Australia to remain covered by the Agreement (i.e. 75% of the total number of employees),
c) of those who accepted the offer, 14% expressed a desire to Nokia Australia to remain covered by the Agreement.
[28] In circumstances were any employee who wanted to remain covered by the Agreement could do so (by rejecting the offer made by Nokia Australia), the fact that 75% of the total number of employees accepted the offer (but did not express a desire to Nokia Australia that they wanted to remain covered by the Agreement) lent support to a conclusion that employees did not feel strongly about having the Agreement continue to apply to them or were ambivalent about the same.
[29] The lack of substantive employee opposition weighed in favour of granting the application.
s.318(3)(b) - whether any employees would be disadvantaged by the Order in relation to their terms and conditions of employment
[30] Nokia Australia submitted that the Transferring Employees would not be disadvantaged by the Order because of the combined operation of the following:
a) the provisions of the National Employment Standards;
b) the offer of ongoing employment with Nokia Australia, which it is submitted was an offer which was both comparable and recognised in full all service with ALU for the purposes of all service-related entitlements;
c) enhanced terms and conditions contained in the Preserved Benefits which:
i. largely replicated and enhanced benefits that were available under the Alcatel-Lucent Employment Partnership Agreement 2009; and
ii. materially increased the minimum rates of pay over and above the rates of pay applicable under the Alcatel-Lucent Employment Partnership Agreement 2009 as at its nominal expiry date of 26 August 2012.
[31] Nokia further submitted that the Order would give the Transferring Employees the benefit of the underlying Modern Award that applied to them. Specifically, it was submitted that, if the Order was made, the Transferring Employees would, on and from 15 July 2017, have access to the following modem award provisions found in either the Professional Employees Award 2010 or the Telecommunications Services Award 2010:
a) Award Flexibility,
b) Consultation, and
c) Dispute resolution.
[32] Nokia submitted that,
“the above provisions found in the relevant and applicable modem awards would provide a more comprehensive and more detailed safety net for the Transferring Employees as compared to the Transferrable Instrument. In particular, access to the Award Flexibility provisions of the relevant award will assist employees to balance their work and family responsibilities by providing flexible working arrangements (consistent with the Objects of the Act).”
[33] Nokia Australia also relied heavily in their submissions on the fact that the Transferring Employees now had a contractual entitlement to Preserved Benefits derived from the Agreement. However, I placed no weight on this submission. The contractual entitlement to Preserved Benefits derived from the Agreement was not conditional on the Agreement not applying to the Transferring Employees. They received the Preserved Benefits regardless of the fate of the application before the Commission.
[34] In any case, the test is not whether Transferring Employees will derive a benefit from the Order, but whether there will be any detriment.
[35] To this end APESMA submitted that there was a concern that some employees may not be covered by the two Modern Awards identified with the consequence that they would be award free. This would mean that they would lose:
a) the benefit of the dispute resolution clause in the Agreement, and
b) protection from unfair dismissal.
[36] This genuine concern was resolved by the applicant agreeing to an amendment to the Order such that it would only apply to Transferring Employees fell within the coverage and classifications of either:
a) the Professional Employees Award 2010; or
b) the Telecommunications Services Award 2010.
[37] APESMA also submitted,
“that Transferring Employees would be significantly disadvantaged in the following respects should the Commission make the orders sought:
a. Child care benefits;
b. Sickness and accident benefit plans;
c. Workplace relocation;
d. Directions to take annual leave;
e. Eligibility thresholds for claiming overtime;
f. Remote site hardship allowances; and
g. Paid leave.”
[38] I gave each of these matters careful consideration and concluded that, in relation to,
a) Child care benefits – this was not a part of the Preserved Benefit and although an amount was “rolled into” contracts by way of remuneration, there could be a detriment moving forward if the application was granted.
b) Sickness and accident benefit plans – this is not a part of the Preserved Benefit or contractual entitlement provided to employees, but the Nokia Group Salary Continuance Insurance benefit is superior to that provided for under the Agreement. I was not convinced that there was a detriment here.
c) Workplace relocation – there was no substantial difference between what was provided for in the Agreement and want was now a contractual obligation to give 4 weeks’ notice of any proposed relocation. I was not convinced that there was a detriment here.
d) Directions to take annual leave – The provisions that would apply are the NES provisions that all employers have. I was not convinced that there was a detriment here.
e) Eligibility thresholds for claiming overtime – the basis for the complaint (around the non-indexation of the current $80,400 salary cap) was misplaced. I was not satisfied that indexation was provided for under the Agreement. I was not convinced that there was a detriment here.
f) Remote site hardship allowances – These allowances are not included in the Agreement. They are enhanced terms in the Preserved Benefits document. That is to say, it is an improvement in conditions.
g) Paid leave – Paid leave entitlements would, if the application was granted, be consistent with the NES. I was not convinced that there was a detriment here.
[39] Consequently, at the end of the analysis I remained only concerned about the issue concerning child care benefits. That prompted the applicant to agree to amend the Amended Orders to provide that,
“The benefit described as the "Childcare Benefit - Reimbursement of Fees" set out at clause 3.3.1 of the Transferring Instrument shall continue to be available to each Transferring Employee provided that any Transferring Employee that elected to negotiate a higher Base Salary (in lieu of the Childcare Benefit) as part of his or her ongoing employment with Nokia Solutions and Networks Australia Pty Ltd, may, on or before 17 August 2017, pursuant to this Order, elect to revert to the Childcare Benefit in clause 3.3.1 in the Transferring Instrument with a consequential adjustment to the agreed Base Salary with Nokia Solutions and Networks Australia Pty Ltd.”
[40] The inclusion of the amendment to the Amended Orders cured any lingering concern I had about the issue being a potential detriment.
[41] Finally, APESMA submitted that another potential detriment was that, if the Agreement did not apply, Nokia Australia could negotiate away the Preserved Benefits. That may well be the case, but that would only occur if the Transferring Employees agreed to do so. I was not satisfied that some hypothetical future situation necessarily constituted a detriment to employees. It might be that they might negotiate away Preserved Benefits in exchange for other terms and conditions more beneficial to them. I put speculating about future wages/conditions bargains out of my consideration.
[42] For these reasons I was not satisfied that there was any detriment to employees if the Order was made. This factor weighed in favour granting the application.
s.318(3)(c) - if the Order relates to an enterprise agreement—the nominal expiry date of the agreement
[43] The nominal expiry date of the Agreement was 26 August 2012.
[44] The fact that the Agreement was now nearly 5 years past its nominal expiry date weighed in favour of the granting the application.
s.318(3)(d) - whether the transferable instrument would have a negative impact on the productivity of the new employer’s workplace
[45] It is to be noted that within the Nokia Australia group (including Alcatel-Lucent) the applicant has been living with the Agreement for some time. And that, because not all employees accepted the offer of employment made to them by Nokia Australia, the Agreement will still operate within the overall business.
[46] Nokia Australia submitted that the Agreement,
“would have a negative impact on the productivity of Nokia Australia's workplace in that:
(a) the preservation of different terms and conditions would have the potential to create disharmony amongst staff and uncertainty as to the terms and conditions;
(b) it is the wish of the Applicant to have the merged workforces work under and be promoted within the classification structure and career matrix that is currently in place within the business of the Applicant, and that the preservation of the classification structure in the Transferring Instrument will form an impediment to career development within the merged operations now trading as the Nokia Group;
(c) the potential negative impact on the productivity of Nokia is the prospect of having an industrial instrument continuing to be binding on a part of its workforce in circumstances where the Nokia Australia workforce does not have or has not had the same terms and conditions. It would be more efficient for Nokia Australia to have the opportunity to establish common terms and conditions to run its business effectively and efficiently across its national workforce which is supported by a single safety net in terms of the relevant modem award and the National Employment Standards;
(d) Nokia Australia should not be expected to maintain, through the preservation of the Enterprise Agreement separate and distinct employment conditions that cannot, under the terms of the Transferrable Instrument, be the subject of individual negotiation;
(e) the preservation of different terms and conditions by way of an Enterprise Agreement will have the potential to give rise to industrial grievances in the workplace and may involve inefficiencies and reduction in productivity;
(f) there are economic benefits in terms of clarity of activities, planning, costing of labour and operation and will permit the Transferring Employees to have:
(i) better access to career advancement; and
(ii) access through their contracts to bonus arrangements intended to increase and maintain motivation and productivity, which provides an attraction and retention strategy.”
[47] In circumstances where Nokia Australia has agreed to provide Transferring Employees with a contractual right to Preserved Benefits derived from the Agreement, the alleged productivity arguments based on the issue associated with having different terms and conditions of employment carried little weight.
[48] To the extent that other arguments were made about other negative impacts on productivity they were not supported by the evidence.
[49] For the most part the applicant’s submissions on productivity appeared to misunderstand the concept of productivity (as opposed to administrative convenience). It was not possible to discern from the submissions how, for example, the ratio output per Transferring Employee (labour productivity) would be improved if the Order was made (or diminished if the Order was not made).
[50] In total the applicant’s submissions about the negative effects on productivity were not persuasive.
[51] This factor was a neutral consideration.
s.318(3)(e) & (f) – economic disadvantage and degree of business synergy
[52] Neither Nokia Australia nor APESMA made submissions about economic disadvantage.
[53] In relation to the degree of business synergy between the Agreement and any workplace instrument that already covers Nokia Australia it was noted that Nokia Australia does not have an enterprise agreement.
s.318(3)(g) - the public interest
[54] The Full Bench Decision in Kellogg Brown & Root Pty Ltd & Ors v Esso Australia Pty Ltd 5 explained the public interest test in the context of a matter which related to the termination of what was then a certified agreement. The Full Bench held that,
"The notion of public interest refers to matters that might affect the public as a whole such as the achievement or otherwise of the various objects of the Act, employment levels, inflation, and the maintenance of proper industrial standards. An example of something in the last category may be a case in which there was no applicable award and the termination of the agreement would lead to an absence of award coverage for the employees. While the content of the notion of public interest cannot be precisely defined, it is distinct in nature from the interests of the parties. And, although the public interest and the interests of the parties may be simultaneously affected, that fact does not lessen the distinction between them." 6
[55] Nokia Australia submitted that,
“in making the Order:
(a) there will be the maintenance of proper industrial standards as a result of the requirement on Nokia Australia to provide the minimum terms and conditions of the appropriate modem award, hence one of the Objects of the Act of fair, relevant and enforceable minimum terms and conditions is met.
(b) the Commission will achieve the Objects of the Act and that, to the extent that the maintenance of proper industrial standards is a matter that might affect the public as a whole, the Commission would be satisfied that in the circumstances the reversion to the applicable modem awards would not offend the public interest.
[56] APESMA submitted that,
“47. Should the Commission grant the orders sought, certain Transferring Employees would be deprived of EPA coverage and would also be employed in roles that would not be covered by any modern Award.
48. In addition or in the alternative, should the Commission grant the orders sought, the coverage of certain Transferring Employees by a modem Award would be unclear.
49. Consequently, should the Commission grant the orders sought, Transferring Employees would be denied the ability to seek relief under the unfair dismissal regime.”
[57] This legitimate concern of APESMA was addressed in the final form of the Amended Orders submitted by the applicant.
[58] APESMA also submitted that,
“c. The preservation of child care benefits under [the Agreement] would better assist Transferring Employees to balance their work and family responsibilities, as per section 3(d) of the Act.”
[59] This legitimate concern of APESMA was also addressed in the final form of the Amended Orders submitted by the applicant.
[60] Finally, APESMA submitted that,
“Permitting the transfer of [the Agreement] recognises and emphasises the importance of enterprise-level collective bargaining in securing and maintaining fair terms and conditions of employment for employees, as per section 3(f) of the Act”
[61] In the present matter the evidence was that there has been bargaining negotiations aimed at replacing the Agreement ongoing since 2013 without success. Further, there was evidence that protected industrial action has been notified and applications for bargaining Orders have been made.
[62] Notwithstanding the attempts being made to replace the Agreement, I was not satisfied that, if I granted the application, there would be, in a public sense, any diminution to the achievement of “productivity and fairness through an emphasis on enterprise-level collective bargaining…”
[63] In any case, employees of Nokia Australia continued to have available to them all the tools and apparatus of the FW Act to attempt to compel Nokia Australia to enter into an enterprise agreement.
[64] For these reasons, the Commission, as presently constituted, was satisfied that it was not against the public interest to grant the Amended Orders sought by the applicant.
[65] Having considered the application and the materials filed in support of the amended application, the Commission, as presently constituted, was satisfied that all the requirements of s.318 of the Act had been met.
[66] An Order was issued on 13 July 2017. 7
COMMISSIONER
1 The original application was filed on 13 June 2017. This decision concerns the amended application filed on 27 June 2017.
2 Transcript PN476-478.
4 Although the concern about the loss of protection from unfair dismissal was resolved by the final form of the Order.
5 (2005) AIRC 72.
6 Ibid para [23].
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